Improper and Abusive Purchases

LaserJet printer purchased for $150—was found. Other items that were lost or stolen included five iPods; a PDA; iPod travel chargers, adapters, flash drives, leather accessories, and two 17-inch LCD monitors—all highly pilferable property that can be easily diverted for personal use. According to officials from the Navy, at the time of the purchase, the command did not have a requirement for tracking highly pilferable items. Additionally, all members involved in the transaction had since transferred and the agency did not have the capability to track where the items might have gone. Navy officials also informed us that the command issued a new policy requiring that pilferable items be tracked.

Case 4 involves a USPS postmaster who fraudulently used the government purchase card for personal gain. Specifically, from April 2004, through October 2006, the cardholder made more than 15 unauthorized charges from various online dating services totaling more than $1,100. These were the only purchases made by this cardholder during our audit period, yet the cardholder’s approving official did not detect any of the fraudulent credit card activity. According to USPS officials, this person was also under an internal administrative investigation for viewing pornography on a government computer. Based on the administrative review, the cardholder was removed from his position in November 2006 after working out an agreement with USPS in which he was authorized to remain on sick leave until his retirement date in May 2007. In April the USPS Office of Inspector General issued a demand letter and recovered the fraudulent Internet dating service charges.

Our data mining identified numerous examples of improper and abusive transactions. Improper transactions are those purchases that although intended for government use, are not permitted by law, regulation, or government/agency policy. Examples we found included (1) purchases that were prohibited or otherwise not authorized by federal law, regulation, or government/agency policy29 and (2) split purchases made to circumvent the cardholder single-purchase limit or to avoid the need to obtain competition on purchases over the $2,500 micropurchase

2948 C.F.R. § 13.301 provides that governmentwide commercial purchase cards may be used only for purchases that are otherwise authorized by law or regulations. Therefore, a procurement using a purchase card is lawful only if it would be lawful using conventional procurement methods. Under 31 U.S.C. 1301(a), “[a]ppropriations shall be applied only to the objects for which the appropriations were made.”